Home Advanced Materials Heat Pump Market Size To reach USD 132.45 billion by 2031

Heat Pump Market

Heat Pump Market Size, Share & Trends Analysis Report By Type (Air-source heat pumps, Water-source heat pumps, Ground-source heat pumps, Hybrid heat pump, Geothermal), By End User (Industrial, Residential, Commercial) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2023-2031

Report Code: SRAM379DR
Study Period 2019-2031 CAGR 7.8%
Historical Period 2019-2021 Forecast Period 2023-2031
Base Year 2022 Base Year Market Size USD 67.38 Billion
Forecast Year 2031 Forecast Year Market Size USD 132.45 Billion
Largest Market North America Fastest Growing Market Asia Pacific
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Market Overview

The global heat pump market size was valued at USD 67.38 billion in 2022 and is projected to reach USD 132.45 billion by 2031, registering a CAGR of 7.8% from 2023 to 2031. This growth is attributed to the increasing demand for energy-efficient and sustainable heating and cooling solutions. The global heat pump market was valued at over USD 43 billion in 2018, and annual installations are expected to surpass the 15 million mark by 2025. 

From a broader perspective, technological developments, consumer preferences, and the shift to greener technologies are driving market growth globally. Heat pumps provide heating, cooling, and hot water to buildings in domestic, public, and industrial sectors and can be located anywhere globally as they make use of the constant temperature of the earth, air, or water source. The majority of heat pumps operate on a vapor-compression cycle, whereas a few heat pumps use the absorption principle, with waste heat as the driving energy. Heat pumps are suitable for use in cooling, space heating, hot water, and industrial heat.

Market Dynamics

Heat Pump Market Drivers 

Widespread Use of Heat Pumps in Over 30 Countries Across Europe Alone

More than two decades worth of R&D have been invested in heat pump technology in Europe, and today, heat pumps are available in more than 30 countries across the region. The concept of heat pumps was developed by Lord Kelvin in 1852, and the first heat pump was built in the 1940s. Commercial heat pumps have been available since the 1960s and 1970s. Modern commercially available units focus on optimized design. The reliability of heat pumps drives their demand across regions and applications.

Heat Pumps: Common Application Areas

  • Swimming pools
  • greenhouses
  • Commercial buildings
  • Hotels
  • Government buildings
  • Apartment buildings
  • Schools
  • District heating systems

Heat Pump Market Restraints

Shift Towards Environment-Friendly & Energy-Efficient Technologies

Rising environmental concerns are catalyzing the shift towards sustainable development and limiting the use of conventional energy sources in a bid to conserve them for future generations. This movement has nudged people to shift towards cleaner alternatives for their personal use. These trends, coupled with the increase in purchasing power parity and improvements in the standard of living, are stimulating the growth of the heat pump market.

The Paris Agreement, which took place in 2015, stipulates that countries must review their greenhouse gas contributions, strive to limit the increase in the global average temperature this century to below two degrees Celsius above pre-industrial levels, and pursue efforts to limit the temperature increase even further to 1.5 degrees Celsius. The agreement has brought all nations together under a common cause to undertake zealous efforts to combat climate change. Governments are providing incentives and tax rebates to people willing to shift to green technologies. The use of solar-powered heat pumps is a step in the right direction, as these pumps are energy efficient and have a low dependence on fossil fuels.

Heat Pump Market Opportunities

Industrialization and Subsequent Growth of End-Use Industries

Ongoing industrialization has accelerated the demand for heat pumps in heating, refrigeration, storage, and process heat and steam applications across various industries. High growth in the construction and residential sectors that require heating solutions in countries across North America and Europe and the need for cooling solutions in Middle Eastern countries collectively contribute to the growth of the heat pump market. The latest trend of green buildings with a low carbon footprint is also contributing to the growth momentum.

Implementation of New Technologies in Heat Pumps

The integration of the Internet of Things (IoT) into the latest heat pump solutions is directed towards automating these pumps and making them yet more energy-efficient as well as capable of providing ambient conditions without user interference. Such advancements are expected to drive the heat pump market in the coming years.

Regional Analysis

The U.S. to Hold the Largest Value Share in North America, Driven by R&D Investments in Renewable Technologies

North America's heat pump market is expected to witness significant growth in the coming years, with the U.S. accounting for the largest value share. In the U.S., the adoption of environment-friendly approaches in new projects has resulted in an increase in R&D investments. As per the UNESCO Institute for Statistics, in 2018, the U.S. spent around 2.7% of its GDP on R&D, creating an array of opportunities for innovations in renewable technologies.

Growth of End-Use Industries to Drive Market Growth in Asia-Pacific, With China as the Frontrunner

Asia-Pacific is witnessing significant growth in the heat pump market during the forecast period, owing to the increasing demand from construction, residential, and industrial sectors. China is the frontrunner in the production of heat pumps in the region. As an example, Northern China has a clean housing policy that mandates half of the heating in the region through clean energy, and this share will be increased to 70% by 2021.

East Asia continues to create a pool of opportunities in the heat pump market, backed by rapid urbanization and industrialization. The increasing preference for green technology by consumers, keeping in mind the effects of climate change and rising global temperatures, and government awareness initiatives are pegged to remain vital demand influencers in East Asia’s heat pump market. Further, an array of energy efficiency and sustainable heating technologies hitting the residential, commercial, and industrial sectors has led to a notable rise in the adoption of heat pumps.

Close to 80% of all new household heat pump installations in 2017 were in the U.S., China, and Japan, accounting for around 35% of the global final energy demand for heating in residential buildings.

Energy Efficiency Initiatives and Widespread Application in Residential Sector to Drive Market growth in Europe

Europe has limited access to natural energy sources, and the shortage is mainly met through imports from all over the globe. The import dependency is expected to increase in the coming years. The European Commission presented a European energy security strategy, identifying the main focus areas for boosting energy security in Europe. Investments in domestic and emission-free renewable energy production and energy efficiency have increased the demand for heat pumps.

Europe’s market is growing quickly, with around 1 million households purchasing a heat pump in 2017, including heat pumps for sanitary hot water production (135,000 units). Norway, Sweden, Estonia, and Finland have the highest penetration rates, with more than 25 heat pumps per 1,000 households per year. Air-to-air heat pumping technologies dominate global sales for households, and at the same time, purchases of other types of heat pumps, such as air-to-water and geothermal heat pumps have also expanded recently.

Report Scope

Report Metric Details
By Type
  1. Air-source heat pumps
  2. Water-source heat pumps
  3. Ground-source heat pumps
  4. Hybrid heat pump
  5. Geothermal
By End User
  1. Industrial
  2. Residential
  3. Commercial
Company Profiles Mitsubishi Electric Enertech Group Carrier Corporation Bryant heat pumps Robert Bosch NIBE Ingersoll Rand Viessmann
Geographies Covered
North America U.S. Canada
Europe U.K. Germany France Spain Italy Russia Nordic Benelux Rest of Europe
APAC China Korea Japan India Australia Taiwan South East Asia Rest of Asia-Pacific
Middle East and Africa UAE Turkey Saudi Arabia South Africa Egypt Nigeria Rest of MEA
LATAM Brazil Mexico Argentina Chile Colombia Rest of LATAM
Report Coverage Revenue Forecast, Competitive Landscape, Growth Factors, Environment & Regulatory Landscape and Trends
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Segmental Analysis

The various types of heat pumps that make up the foundation of an energy source are air source, water source, and ground source. Air-source heat pumps use the atmospheric energy available outside for heating and cooling. They can be installed as compact units completely indoors or outdoors. The split systems consist of one unit inside the building and the other outside. Water source heat pumps utilize the energy stored in the ground, surface, or seawater. 

At locations where groundwater is easily available, two drillings are made for access, one of which is used as a water source, while the other is used to reinject water into the ground. Water source heat pumps extract heat from the water and make it available for heating, cooling, and the preparation of hot water. Ground source heat pumps utilize the energy stored in the ground; they extract heat from the ground with the help of a vertical or horizontal collector.

Heat pumps find application in industrial, commercial, and residential sectors. Residential heat pumps provide each property with personalized control of heating, hot water, and cooling. In many industrial processes, heat pumps are used to recover process waste heat. They are used in distillation and evaporation processes, for water heating, combined heating and cooling, and dehumidification. Among all industries, food and chemicals are expected to present numerous opportunities for the heat pump market.

Market Size By Type

Recent Developments

  • July 2022: Viessmann Werke GmbH & Company KG announced that it was constructing a new production facility in Legnica, Poland, to hasten the ramp-up of heat pump production in Europe. Additionally, the business might be spending 200 million euros on new technology sites. In 2023, the construction is anticipated to be finished.
  • May 2022: A contract for the purchase of 50% of the shares of the Italian company Argoclima and the remaining stake within five years was signed by NIBE Industrier AB. Heat pump and air conditioning products are produced and distributed in Italy by Argoclima SpA.
  • January 2024: Bosch’s new cold climate heat pump can operate in extreme conditions—even down to -13° Fahrenheit.

  • February 2024: Following the confirmation of reductions in the European heat pump market by the most recent financial numbers, Swedish producer Nibe has announced steps to simplify its operations.

Top Key Players

Mitsubishi Electric Enertech Group Carrier Corporation Bryant heat pumps Robert Bosch NIBE Ingersoll Rand Viessmann Others

Frequently Asked Questions (FAQs)

What is the growth rate for the Heat Pump Market?
The market size will grow at approx. CAGR of 7.8% during the forecast period.
Some of the top industry players in this market are, Mitsubishi Electric, Enertech Group, Carrier Corporation, Bryant heat pumps, Robert Bosch, NIBE, Ingersoll Rand, Viessmann, etc.
In this market, North America has established itself as the market leader with a significant market share.
The market has seen the most substantial growth rate in Asia Pacific.
The global market of heat pump report is segmented as follows: By Type, By End User

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